Twitter's Acquisition of Gnip Highlights Rise of Aggregators in DaaS Market

On Tuesday, social media giant Twitter announced that it is buying Data as a Service (DaaS) provider Gnip for an undisclosed amount. Gnip, which is one of several companies that sell access to the firehose of the content posted on Twitter, was founded in 2008 and today offers data from a number of popular user-generated services in addition to Twitter.

As Twitter VP of Global Business Development & Platform Jana Messerschmidt explains, "We want to make our data even more accessible, and the best way to do that is to work directly with our customers to get a better understanding of their needs." For Twitter, flush with cash from its 2013 IPO, buying one of the companies it has partnered with to sell real-time firehose access was an obvious way to gain direct access to the growing number of companies using its data.

According to Messerschmidt, the acquisition will give the company the ability to develop more useful offerings. "We believe Gnip has only begun to scratch the surface. Together we plan to offer more sophisticated data sets and better data enrichments, so that even more developers and businesses big and small around the world can drive innovation using the unique content that is shared on Twitter," she says.

DaaS: Aggregation crucial to success?

The rise of the DaaS market reflects the insatiable demand businesses have for data. Data from the social web, in particular, has been particularly appealing to companies and is increasingly used in a variety of applications, such as brand monitoring and sentiment analysis. Companies like Gnip and DataSift, which ProgrammableWeb's Janet Wagner recently profiled, have taken advantage of the demand by aggregating data from a variety of sources, including Facebook, Instagram and Foursquare, and making them available via API.

Interestingly, a number of data providers have chosen to offer their data firehoses exclusively through Gnip instead of selling access to their APIs directly. This raises an important question: might it become increasingly difficult for some data providers to succeed with a homegrown DaaS strategy?

It's logical that companies hungry for data will prefer to acquire access to new data sources quickly and without unnecessary one-off integrations. DaaS providers like Gnip can offer access to a growing portfolio of data sets through a single relationship and unified, consistent API, potentially making them more attractive than competing data offerings that are sold individually by a company that can only offer its own data and API.

While Twitter ostensibly purchased Gnip with a focus on improving the delivery of its own data, if the aggregation trend continues to gain momentum, the microblogging company's purchase of Gnip could put Twitter in an ideal position in the booming data economy.

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